No that's HTTP Redirect, this is URL Rewrites.
HTTP Redirect doesn't work anymore due to location of the web.config file and a cyclical loop causing a 'page cannot be displayed' issue when you point both host headers to the same folder path. (as you used to in IIS6)
As an aside, why does MS force you to pick a folder path for the website anyway, when all you want is a host header redirect, which you would have thought they would have sorted in IIS7 , not make things worse!
It's ok though, through that I found that the web.config is in the folder location of the website path not wwwroot as the IIS forum suggested.
The other problem I have found, is even after removing all rewrites to try to work out what was going on, IE9 is still performing rewrite redirection.
so it's not just the rewrite engine sending me on a wild goose chase but some bizzarre bechavior with IE9 and remembering settings that don't exist anymore.
I booted into my XP VM environment and used IE8 and the redirection doesn't happen.
So when I get 5 minutes to look at the rewrites again, I'll have to use XP/IE8 to test as IE9 is screwy, which our server support company has also confirmed.
Never rains does it!